Paul Markham, head of global equities at Newton Investments, discusses how traders could capitalize on the seasonal low volume and highly volatile environment. He also unpacks his view on opportunities in the AI / semi-conductor space, the Chinese real estate market and the danger of the Bank of England being overly aggressive in their interest rate move this week.
- Equities volumes are very low and liquidity is poor for the year to date.
- US investment grade volumes have stabilized and liquidity appears good as bid-ask spreads are tight for 2023.
- Data: Job Openings on August 1 and US Unemployment Rate and Non-Farm Payrolls on August 4.
- US axe data, which is within normal ranges, indicates a much higher proportion of buying versus selling in credit.
Europe and the UK
- Equities volumes remain down yet bid-ask spreads appear marginally tighter than the 2023 weekly average.
- Euro Investment grade volumes are low for the year but liquidity is good for year-to-date ranges.
- Data: Eurozone GDP and Core Inflation on July 31; UK unemployment August 1 and BoE rate meeting August 3
- EU axe data, which is within normal ranges, suggests a higher proportion of EU dealer bids Vs asks in credit
- GBP axe data, within normal ranges, suggests slightly higher net buying Vs selling of credit